Gramicci Finds Growth Partner in Haggar

December 21, 2009
SGB Update

Haggar Clothing Co., the men's dress and casual apparel giant, has secured the master license agreement for the Gramicci brand. The current Gramicci team will continue to operate the business under a licensed agreement but is expected to benefit from Haggar's strengths in finance, production and marketing.


Marty Weening, president of Gramicci, told SportsOneSource that as the owners of the master license, Haggar acquires the Gramicci licenses and takes over financial responsibility for the brand. Operating through a license, the current Gramicci team, which will continue to be based out of Agoura Hills, CA, retains creative control of the brand and will lead research & product development, merchandising, design, marketing, sales, customer service, distribution, and sourcing.


Haggar will oversee financing, including accounts payables and receivables as well as credit; operations, administration and worldwide quality control. Haggar is expected to help assist Gramicci in sourcing, marketing and advertising.


Weening noted that the partnership, which began in November, has already helped Gramicci significantly reduce sourcing costs. Fall 2010 prices have been lowered by between 8% and 20%. This has increased dealer profit margins between 5% and 10%, taking them to 56% to 64%. Retail prices will be reduced $4 to $15 versus a year ago.


Overall, Weening said the master license agreement allows both companies to leverage the combined distribution, financial and logistics platform while retaining Gramicci's positioning in the market.


“The two companies will continue to operate in a manner that will yield the most positive of outcomes by virtue of the strong positions each represent in their respective channels,” said Weening. “The combined strength of the platform and strategic independence of the brands/companies is what makes the MLA a great development for both companies and the market.”


There no plans currently to take Gramicci into any other business outside its core outdoor position. But Weening said the partnership may open up new distribution for Gramicci if it makes sense. Said Weening, “That means if the product can successfully sell in that channel and continue to service the needs of its loyal consumer base.”


However, World Cross Culture just signed an exclusive outerwear license agreement for the Haggar brand.


Haggar, founded in 1926, specializes in pants, sport coats, suits, shirts, and shorts. The brand is sold in department stores, such as J. C. Penney, Kohl's, and Sears, and at more than 70 Haggar outlet stores.
Weening said Gramicci wasn't on the selling block. “A Haggar board member and investor visited the Gramicci Booth at OR and went on to investigate the potential of the brand and things developed from there,” explained Weening.


But the two companies share a connection. Sole Assets Inc., Gramicci's parent, is owned by Paul Buxbaum, chairman and CEO of Buxbaum Group. Buxbaum has been CEO of Haggar since March 2009. Formerly a public company, Hagar was sold to the private investment firm Infinity Associates LLC in 2005.

Gramicci Finds Growth Partner in Haggar

SGB Update

Haggar Clothing Co., the men's dress and casual apparel giant, has secured the master license agreement for the Gramicci brand. The current Gramicci team will continue to operate the business under a licensed agreement but is expected to benefit from Haggar's strengths in finance, production and marketing.


Marty Weening, president of Gramicci, told Sports Executive Weekly that as the owners of the master license, Haggar acquires the Gramicci licenses and takes over financial responsibility for the brand. Operating through a license, the current Gramicci team, which will continue to be based out of Agoura Hills, CA, retains creative control of the brand and will lead research & product development, merchandising, design, marketing, sales, customer service, distribution, and sourcing.


Haggar will oversee financing, including accounts payables and receivables, as well as credit, operations, administration and worldwide quality control. Haggar is expected to help assist Gramicci in sourcing, marketing and advertising.


Weening noted that the partnership, which began in November, has already helped Gramicci significantly reduce sourcing costs. Fall 2010 prices have been lowered by between 8% and 20%. This has increased dealer profit margins between 5% and 10%, taking them to a range of 56% to 64%. Retail prices will be reduced $4 to $15 versus a year ago.
Overall, Weening said the master license agreement allows both companies to leverage the combined distribution, financial and logistics platform while retaining Gramicci's positioning in the market.

“The two companies will continue to operate in a manner that will yield the most positive of outcomes by virtue of the strong positions each represent in their respective channels,” said Weening. “The combined strength of the platform and strategic independence of the brands/companies is what makes the MLA a great development for both companies and the market.”


There are no plans currently to take Gramicci into any other business outside its core outdoor position. But Weening said the partnership may open up new distribution for Gramicci if it makes sense. Said Weening, “That means if the product can successfully sell in that channel and continue to service the needs of its loyal consumer base.”


Weening said Gramicci wasn't on the selling block. “A Haggar board member and investor visited the Gramicci Booth at OR and went on to investigate the potential of the brand and things developed from there,” explained Weening.


But the two companies share a connection. Sole Assets Inc., Gramicci's parent, is owned by Paul Buxbaum, chairman and CEO of Buxbaum Group. Buxbaum has been CEO of Haggar since March 2009. Formerly a public company, Haggar was sold to the private investment firm Infinity Associates LLC in 2005.


Haggar, founded in 1926, specializes in pants, sport coats, suits, shirts, and shorts. The brand is sold in department stores, such as J. C. Penney, Kohl's, and Sears, and at more than 70 Haggar outlet stores.
World Cross Culture just signed an exclusive outerwear license agreement for the Haggar brand.

Gramicci Finds Growth Partner in Haggar

SGB Update

Haggar Clothing Co., the men's dress and casual apparel giant, has secured the master license agreement for the Gramicci brand. The current Gramicci team will continue to operate the business under a licensed agreement but is expected to benefit from Haggar's strengths in finance, production and marketing.


Marty Weening, president of Gramicci, told SportsOneSource that as the owners of the master license, Haggar acquires the Gramicci licenses and takes over financial responsibility for the brand. Operating through a license, the current Gramicci team, which will continue to be based out of Agoura Hills, CA, retains creative control of the brand and will lead research & product development, merchandising, design, marketing, sales, customer service, distribution, and sourcing.


Haggar will oversee financing, including accounts payables and

receivables as well as credit; operations, administration and worldwide quality control. Haggar is expected to help assist Gramicci in sourcing, marketing and advertising.


Weening noted that the partnership, which began in November, has already helped Gramicci significantly reduce sourcing costs. Fall 2010 prices have been lowered by between 8% and 20%. This has increased dealer profit margins between 5% and 10%, taking them to 56% to 64%. Retail prices will be reduced $4 to $15 versus a year ago.
Overall, Weening said the master license agreement allows both companies to leverage the combined distribution, financial and logistics platform while retaining Gramicci's positioning in the market.


“The two companies will continue to operate in a manner that will yield the most positive of outcomes by virtue of the strong positions each represent in their respective channels,” said Weening. “The combined strength of the platform and strategic independence of the brands/companies is what makes the MLA a great development for both companies and the market.”


There no plans currently to take Gramicci into any other business outside its core outdoor position. But Weening said the partnership may open up new distribution for Gramicci if it makes sense. Said Weening, “That means if the product can successfully sell in that channel and continue to service the needs of its loyal consumer base.”


Weening said Gramicci wasn't on the selling block. “A Haggar board member and investor visited the Gramicci Booth at OR and went on to investigate the potential of the brand and things developed from there,” explained Weening.


But the two companies share a connection. Sole Assets Inc., Gramicci's parent, is owned by Paul Buxbaum, chairman and CEO of Buxbaum Group. Buxbaum has been CEO of Haggar since March 2009. Formerly a public company, Hagar was sold to the private investment firm Infinity Associates LLC in 2005.


Jon Ragsdale, SVP of marketing and merchandising for Haggar, said the addition of Gramicci further leverages the strength of Haggar platform with an extension into outdoor apparel.


“Gramicci represents authentic and true product which resonates more energetically than ever with the consumer,” said Ragsdale. “The success Haggar has experienced provided an opportunity to extend to new opportunities for growth.”


Regarding Gramicci's performance, Weening said the brand has consistently grown for the past four and half years since Sole Assets took control in 2005.


“The brand is a consistent proven success at retail,” said Weening. “Our business is slightly ahead over last year and we consider that good considering.”  


Driving that growth has been steady gains in the Gramicci G series of pants shorts. A standout has been Gramicci’s eco product – nicknamed GREENICCI – that now represents over 55% of its offerings in men's and 65% in women's. It is consistently selling at retail at regular price in the 65% plus level, Weening said.


Gramicci is more recently finding success with its launch of an expanded selection of archival Gramicci designs, entitled “Old School is New School.”


“These archrivals designs are priced  at retail between 8% and 20% less than in the 80s or 90s,” said Weening. “The response to this major move has been remarkable.”


Operationally, Weening said Gramicci has shipped on average for the past four years 92% complete and on time versus 54% in the year prior to his taking over in January 2006. Gramicci has also been able to reduce its quality fall out from a high of 14% in 2004 to less than 3% in 2009.


On the marketing front, a social and environmental hub has been established on Gramicci's website to introduce change makers and their organizations to “Gramicciheads.” Sponsorship of athletes, musicians, artists will be also play an increasingly important role in promoting the brand's roots.


Weening said the while the Gramicci brand “appears stronger than it has ever been,” the downturn has affected its dealers. As a result, Gramicci continues to look to help them through the challenging period. With the new relationship already dramatically lowering sourcing costs in key categories, Weening expects the Haggar partnership will continue to provide value for customers.

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